Well… Maybe interesting is the wrong word as I admit I am one of the few that enjoy legal documents…
As many of you know, Homeowner Associations are governed by many documents; Covenants, Conditions & Restrictions, Bylaws, Articles of Incorporation, Plats, etc which are often referred to as simply “governing documents”. Now this may not seem like much of an issue on the surface but when you consider that each and every HOA has these documents in some form or another, that each and every HOA’s governing documents are unique and finally that an estimated 90% of homeowners have never read these documents, therein lies the issue. Board members are almost always volunteers who receive no financial compensation for their often large amounts of time spent. Thus, thrusting just one more “responsibility” on these volunteers is often met with at least some amount of friction. Add to that the fact that most of these documents are not the most “exciting” read in the world and you have the precise recipe to this important step not taking place. However it is of critical importance that Board members and homeowners do in fact read and understand these documents as they are virtually the only source of authority given to Boards and their associations.
Below are just a couple of examples:
Parking space, in an attached dwelling Association such as Town homes and Condominiums is often at a premium. The common reason for this is simply available land. Developers and Builders make their money on selling of lots and/or homes and not (very often at least) parking spaces. Therefore they maximize their potential revenue by maximizing the number of lots/homes and thus minimizing parking spaces. Unfortunately, the developer (very likely by accident) did not grant authority to the HOA in the governing documents to regulate parking. If this ends up being the case, the HOA will be hard pressed to regulate parking in any way even if it does cause friction between members.
Use of common Assessments, Community members and Board members often want to do many things to change and improve their HOA and thus have many items they would like to spend assessment money on. However, in many governing documents there is a clause the spells out what the Association can use assessment funds for. The documents are often silent as to what cannot be done with Assessments as the list would be almost infinite, and the simple answer to what cannot be done is this: If the documents do not say that you can use common funds, then very often you cannot. An example of this might be mail boxes. The mail boxes in a Townhome association are standard mailboxes but they are grouped together on a pole with 5 or 6 boxes per pole. All of the mailboxes become faded and rusted and need some maintenance. A board member or resident suggests that to make it easier the HOA should just replace or maintain them with common funds. However, the documents do not say that you can use common funds for the benefit of any one (or more than one but less than all) members. In this case, the HOA should not repair/replace those mailboxes as the benefit goes to only those homeowners.
The list of similar examples is virtually unlimited and can only be solved by reading your governing documents, then re-reading them. If it is still unclear, ask your community manager for their advice and if needed, get the HOA attorney to review it to assure you are making the right decision.
The moral of this story is essentially that, even if you use your governing documents as merely a way to put yourself to sleep at night, it is important that you do read and understand them. Cedar Management Group has experience with hundreds of HOA’s governing documents as well as experience to which documents might control in a given situation and we are happy to assist communities in making solid decisions based on those documents. We are not lawyers, but truth be told, we do enjoy this stuff and we relish each and every opportunity to help communities understand all of it.